Sage Instant Accounts and Advertising

[Old Bear]

Hi,

I am in the processing of setting up Sage Instant Accounts (2012).
Initially I couldn't find a (Nominal) code for Advertising and promotion.
After searching I found the codes for Advertising etc underneath "Direct Expenses". This is puzzling me as I would expect to classify Advertising as an Overhead rather than a direct cost of sale.

Should I:

• use the Sage codes, as this is how the program is written?
• re-create required Advertising codes within "Overheads"?

or, am I wrong; can someone explain the error of my ways?

:|

 

[HPS - Outsourced Payroll]

Hello

It depends on the nature of your business.

If you are selling lets say Sage instant accounts, you would advertise this and folk would come along and click on the link and buy the product, therefore advertising is a direct cost of selling your product.

If you are offering outsourced payroll services as we do, then advertising is an overhead. We don't need the advertising to get the work, we can get work through referals, directly approaching potential clients, networking etc.

I hope this helps.

Toni - HPS

 

[Old Bear]

Hi Toni,

Thank you.

Yes, my business is closer to the second model. Where, like yourselves I use several methods of advertising and promotion.

This being the case I should create the codes needed under Overheads.

If I were at some point to start offering goods via the web, do I then need the original codes (in effect spiting and doubling the recording of advertising), or is it ok to use the Overhead codes for all advertising?

Many thanks,
Simon

 

[Scalloway]

What matters is what makes sense to you. If you think that identifying direct advertising separately will help you mangage your business better then do it.

 

[HPS - Outsourced Payroll]

Hello Simon

You can split the advertising if you wish in the accounts.

The last post was correct, it is what works for you and must be consistent.

So you could have general advertising as one nominal code and direct advertising as another.

The only concern you have is if you are not doing the accounts yourself, would someone else be able to follow what you have done.

Remember, some accountants don't tend to do free work very often so if they have to spend some time in working out what you have done, they will most likely charge you for it.

Toni